It’s Official: FDIC is Broke, Broke!—To the Tune of 8.2 Billion Dollars!

Uhm…  I’m keeping an eye on my bank!  The moment they show up on the FDIC’s list of problem institutes, I’m outta’ there!

DIF Balance (In Millions)
3/06 49,193
6/06 49,564
9/06 49,992
12/06 50,165
3/07 50,745
6/07 51,227
9/07 51,754
12/07 52,413
3/08 52,843
6/08 45,217
9/08 34,588
12/08 17,276
3/09 13,007
6/09 10,368
9/09 -8,243

Banking sector back to profit, insurance fund in red: FDIC

(AFP)

WASHINGTON — The US banking industry returned to profit in the third quarter, but the government insurance fund went into deficit for the first time since 1992, regulators announced Tuesday.

The Federal Deposit Insurance Corp. said commercial banks and thrifts earned a collective 2.8 billion dollars in the third quarter.

This came after a collective 4.3 billion dollar loss in the second quarter, and the profit was well above the 879 million dollars the industry earned in the same period in 2008.

But the sector is still feeling the effects of the deep financial crisis triggered by a collapse of the US housing market and global credit crunch.

“Today’s report shows that, while bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance,” said FDIC chairman Sheila Bair.

More than 26 percent of all insured institutions reported a net loss in the latest quarter, and total loan balances declined by the largest percentage since quarterly reporting began in 1984, the FDIC said.

As projected in September, the FDIC’s deposit insurance fund balance fell below zero for the first time since the third quarter of 1992.

The fund balance of negative 8.2 billion dollars reflects a 38.9 billion dollar contingent loss reserve that has been set aside to cover estimated losses over the next year.

The FDCI report showed total loans and leases declined by 210.4 billion dollars, or 2.8 percent, during the quarter.

Loans to commercial and industrial borrowers declined by 6.5 percent, residential mortgage loan balances fell by 4.2 percent, and real estate construction and development loans dropped 8.1 percent.

“There is no question that credit availability is an important issue for the economic recovery,” Bair said.

“We need to see banks making more loans to their business customers. This is especially true for small businesses that rely on FDIC-insured institutions to provide over 60 percent of the credit they use.”

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6 Comments on “It’s Official: FDIC is Broke, Broke!—To the Tune of 8.2 Billion Dollars!”

  1. CavMom Says:

    So… We begin pulling out our money (what is left of it)… How much longer is the dollar going to be worth the paper it is printed on?

    I am trading my savings in for BRASS!

  2. Bob Says:

    I have been a credit union member for the last 35+ years. Credit unions are not for profit, and their stockholders are their members (account holders). In this period of time, I have seen many attempts by banks to enact legislation that would make it more difficult for credit unions to do for their members what they do. Notice that NO credit unions jumped on the TARP bandwagon. Credit unions don’t have many of the fees and charges like banks do, and usually pay a higher rate on deposits and charge less interest on loans than banks do.
    My suggestion is for everyone to join their local credit union, and tell banks (especially Bank of America, to stuff it where the sun doesn’t shine.
    If it weren’t for the bailout, many of these banks (which I consider criminal organizations, at best)wouldn’t even be in business anymore, and I say good riddance to them when they fail.

  3. Bob Says:

    Didn’t I recently read something at this site about the FDIC trying to force banks to pay 3 years ahead on their insurance payments?

  4. ciccio Says:

    As doctorbulldog says, you read right. To add to doctorbulldog, if the FDIC gets its way and collects those advance premiums to pay for current losses, the profits supposedly made by the banks will be wiped out.
    Not really wiped out, they will still be there on paper but they wont be used to make loans or pay dividends, they will be sitting with the FDIC. Those $2.8 billion the banks have finally made is just a tiny share of the FDIC’s demands.


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